Consolidated Financial 

t 

Statements of the 

United States Government 

Fi-seal Year 19 79 

(~ 

i 

PROTOTYPE· 
Statement of the Fiscal Assistant 

Secretary of the Treasury 

The Treasury Department is continuing its efforts to improve governmental accounting 

and financial reporting with the publication of this prototype financial report. Like its predecessors, the report is part of an experimental effort to expand the use of accrual accounting 

concepts in Government and stimulate improvements in financial reporting. 

Publication of the FY '79 report was delayed to permit inclusion of revised pension liabilities under Public Law 95-595 for the Military Retirement System and the Civil Service Retirement System. This change in accounting treatment results in a significant increase in pension liabilities. 

Treasury will continue to consider alternative financial statement formats. The experimental set of summary-level statements first introduced last year have been included again 

in this year's report. The significant feature of these alternative statements is the focus on 

selected current assets and liabilities of the Government. The excess of current liabilities 

over current assets is defined by identifying the approximate amount of liabilities incurred 

that will mature over the next year and the current assets presently available to liquidate 

them. 

The Comptroller General's lnteragency Advisory Committee has completed its work and 

task group recommendations have been made for future improvements. I would like to express my sincere appreciation to Comptroller General Staats and the many top financial officials of various agencies who participated in this effort. I would especially like to thank the 

following individuals who served as chairmen of the various task groups: 

• Allowance for Losses on Accounts and Loans Receivable-Richard Reidenbach. 

Chairman-Department of Health and Human Services. 

• Asset Valuation-John Ferber. Chairman-National Aeronautics and Space 

Administration. 

• Taxes Receivable-Howard Nester. Chairman-Department of the Treasury. 

• Federal Employee Retirement Systems and Social Security-Ronald J. Points. Chairman-U.S. General Accounting Office. 

• Estimated Losses on Loan Guarantees-David Gillogly. Chairman-Office of 

Management and Budget. 

• Estimated Losses on Insurance in Force-William P. Carley, Chairman-Federal 

Deposit Insurance Corporation. 

• Inflation Accounting-Walter Bennett. Chairman-Department of Commerce. 

During the coming year. Treasury will evaluate the task group recommendations. Plans 

will then be developed for the collection of financial data identified by the task groups. Any 

additional developmental work required will be coordinated with the Federal agency 

concerned. 

As indicated in previous reports. these financial statements are not intended to compete 

with the budget process. The President's budget document submitted to the Congress is the 

Government's primary tool for planning and controlling the allocation of economic resources. 

Also. this report is not and should not be regarded as the Government's official report on its 

financial condition. A significant amount of additional research. discussion. and debate is 
2 

necessary before reports such as this prototype .can be considered to be prepared on the 

basis of generally accepted accounting principles. 

Reader reactions and comments on this prototype report are welcome. 

Gt~~ 

· Paul H. Taylor 

Fiscal Assistant Secretary 

. Date: April 27, 1981 

{' 

,_ 
Statement of the United States 

General Accounting Off ice 

This statement. like its predecessors, is preliminary in nature and is intended to provide 

a broad focus on information that is useful in assessing the financial activities of the Federal 

Government. Over the past year, significant progress was made by the various lnteragency 

Advisory Committee task groups to resolve various technical problems with the data. 

However. much remains to be done before satisfactory statements can be prepared. In 

tpis respect. the General Accounting Office continues to support this effort, because we 

believe that consolidated financial data on Government activities can provide a broader 

perspective on the overall financial condition of the Federal Government. 

The General Accounting Office currently has a project underway to develop a conceptual framework for financial accounting and reporting in the Federal Government. This effort 

is aimed at establishing the objectives and concepts to be used in developing standards of 

financial accounting and reporting. Three exposure drafts have been issued. The first draft 

sets forth the objectives toward which accounting and financial reporting is directed, thesecond defines financial reporting elements. and the third sets forth the measurement concepts. Other items to be covered by future statements include recognition concepts. reporting concepts. and identification of the reporting entity. We are confident that this project will 

lead to more useful financial information and will complement the work being done by the 

Department of the Treasury to improve governmental accounting and financial reporting. 

We encourage your review of our exposure drafts and of this prototype financial report. 

As with prior year reports. the accompanying consolidated financial statements for the 

fiscal year ended September 30. 1979. are not audited by us and. accordingly. we do not express an opinion on them. 

Date: April 27. 1981 

0. L. Scantlebury 

Chief Accountant and Director 

Accounting and Financial 

Management Division 

3. 
.J 

Introduction 

This prototype report continues to emphasize the need to further study, experiment, impr9ve and expand the summary level of financial reporting in the governmental sector. The 

Treasury Department and the General Accounting Office are continuing their efforts in this 

area. The need for additional study and analysis is based on a lack of consensus as to the 

nature of financial formats needed in the public sector. 

As with the previous year's presentation, this prototype report includes an alternative 

statement format. This alternative statement approach was chosen for· various reasons: 

• The concepts for governmental summary-level statements continue to be discussed. 

• The nature of governmental operations may require an alternative to business-type 

financial statements. 

• The alternative formats give the reader a starting point for discussion and comparison 

of various formats available and their usefulness in governmental financial reporting. 

The alternative statements are based on the same financial data used in other statements of this report. The Consolidated Statement of Selected Current Assets and Liabilities 

is a measure of short-term liquidity and provides a basis for assessing near-term financing requirements as of the statement date. This statement can also give some indication of future 

Government spending requirements. The financial data provided by this link may be a practical basis from which to evaluate the additional financing requirements that will result from 

program activities approved for future periods. Since such programs involve future periods of 

time, the financial results of their activities are not reflected in historical data. Reviewing the 

statement over several cycles of operations, in conjunction with proposed or approved programs for periods in the immediate future, can show the extent to which borrowings and 

operating revenues will be required. 

The Consolidated Statements of Other Assets and Other Liabilities focus on the size 

and long-term nature of the Government's operations. The -characteristics of many of the 

Government's assets and liabilities are uniquely associated with the purpose and structure 

of government. For example, it has been argued that the national debt differs in its essential 

nature from the liabilities of other organizations; in particular, there is no expectation that the 

national debt is to be repai_d from assets listed on a current balance sheet. On the other hand, 

significant economic assets are controlled by the Government forming a large part of the Nation's wealth. Some are resources that must be maintained for a given level of service; 

therefore, the use of these assets does affect the long-term financing requirements of the 

Government. Any review of the other assets and other liabilities of the Government must take 

into consideration the scale of operations as it relates to the characteristics of the Government in the total economy . 

The Consolidated Statement of Changes in the Operating Cash Balance identifies the 

relationship between the operating cash balance, borrowing from the public, and the annual 

budget results. This additional statement, as well as the three statements described above, 

must be considered as an integral part of the group of statements presented in this report. 

These statements include: the Consolidated Statement of Financial Position which shows 

what the Government owns (its assets), what it owes (its liabilities), and its accumulated position, end of period; the Consolidated Statement of Operations which compares the revenues 

and expenses that can be attributed to the current reporting period; the Consolidated Statement of Changes in Financial Position which -identifies the relationship of resource flows to 

the change in position of cash and monetary reserves; and the Notes to Financial Statements 

which provide more detailed disclosure on certain financial data in the statements. 

5 
Consolidated Financial Statements 
8 

United States Government Consolidated Statement 

of Financial Position as of September 30, 1979 and 1978 

[In billions) 

Assets 

/What the Government owns-resources that are available 

to pay liabilities or to provide public services in the future) 

1979 1978 

Cash and monetary reserves 

Operating cash in the Treasury ................... . 

International monetary reserves (Note 2) ........... . 

Other cash ................................... . 

Receivables (net of allowances) 

Accounts receivable ........................... . 

Accrued taxes receivable (Note 3) . ................ . 

Loans receivable (Note 4) . ....................... . 

Advances and prepayments ..................... . 

Inventories (at cost) (Note 5) 

Goods for sale ................................ . 

Work in process ............................... . 

Raw materials ................................ . 

Materials and supplies for Government use ......... . 

Stockpiled materials and commodities ............. . 

Property and equipment (at cost) 

Land (Note 6) . ................................ . 

Buildings, structures, and facilities (Note 7) . ........ . 

Military hardware (Note 8) . ...................... . 

Equipment (Note 8) . ........................... . 

Construction in progress ........................ . 

Other ....................................... . 

Accumulated depreciation (Note 9) . ............... . 

Deferred charges and other assets .................. . 

Total .................................... . 

The accompanying notes are an integral part of this statement. 

$24.2 

15.2 

10.5 

$22.4 

18.8 

5.0 

49.9 46.2 

9.2 

26.7 

138.8 

3.4 

7.7 

24.0 

119.9 

5.3 

178.1 156.9 

15.4 

1.0 

3.6 

40.5 

14.1 

74.6 

9.3 

112.3 

158.8 

54.4 

25.5 

1.6 

361.9 

(180.4) 

28.0 

$512.1 

16.1 

.9 

2.0 

35.2 

13.7 

67.9 

9.1 

110.2 

152.3 

45.9 

21.1 

1.7 

340.3 

(170.0) 

24.4 

$465.7 
United States Government Consolidated Statement 

of Financial Position as of September 30, 1979 and 1978 

[In billions] 

Liabilities 

/What the Government owes-liabilities incurred in the 

past that will require cash or other resources in the future/ 

1979 1978 

Accounts payable ............................... . 

Unearned revenue ............................... . 

Borrowing from the public (Note 10) . ................ . 

Accrued pension, retirement, and disability 

plans (Note 11) 

Military personnel ....................... : ..... . 

Civilian employees ............................. . 

Social security ................................ . 

Veterans compensation ........................ . 

Federal employees compensation ................ . 

Loss reserves for guarantee and insurance 

programs (Note 12) . ............................ . 

Other liabilities .................................. . 

Total .................................... . 

Accumulated Position 

Accumulated position beginning of period ............ . 

Prior period adjustment (Note 13) . .................. ·. 

Restated accumulated position beginning of period .... . 

Current period results ............................ . 

Current noncash provision for social 

security (Note 14) . ............................. . 

Accumulated position end of period ................. . 

Total ........................... · ......... . 

$77.7 

14.8 

639.4 

303.9 

368.7 

1,061.9 

153.0 

8.7 

1,896.2 

2.3 

51.4 

$2,681.8 

(1,898.9) 

(14.0) 

(1,912.9) 

(122.8) 

(134.0) 

(2,169.7) 

$512.1 

The accompanying notes are an integral part of this statement. 

$65.8 

11.3 

606.7 

210.1 

356.2 

928.0 

143.9 

8.2 

1,646.4 

3.2 

45.2 

$2,378.6 

(1,683.2) 

(13:2) 

(1,696.4) 

(91.1) 

(125.4) 

(1,912.9) 

$465.7 

9 
10 

United States Government Consolidated Statement of Operations for 

the Years Ended September 30, 1979 and 1978 

[In billions] 

1979 1978 

Revenues 

Levied under the Government's sovereign power 

Individual income taxes ....................... . $217.8 $181.0 

Corporate income taxes ...................... . 68.4 70.5 

Social insurance taxes and contributions ......... . 141.6 123.4 

Excise taxes ................................ . 18.8 18.4 

Estate and gift taxes ......................... . 5.4 5.3 

Customs duties ............................. . 7.4 6.6 

Miscellaneous .............................. . 11.2 9.0 

470.6 414.2 

Earned through Government business-type operations 

Sale of goods and services .................... . 17.4 15.3 

Interest .................................... . 10.7 8.0 

Other . : ..... · .............................. . 30.7 30.3 

58.8 53.6 

Total .................................... . 529.4 467.8 

Expenses by function (see also summary of expenses 

by object and agency) 

Administration of justice ........................ . 3.9 3.6 

Agriculture ................................... . 5.9 7.1 

Commerce and housing credit ................... . 1.3 2.4 

Community and regional development ............. . 9.6 11.1 

Education, training, employment, and social services .. 26.4 24.7 

Energy ...................................... . 8.5 6.6 

General government ........................... . 13.6 11.5 

General purpose fiscal assistance ................ . 17.4 18.7 

General science, space, and technology ........... . 5.2 4.4 

Health ...................................... . 55.7 50.4 

Income security 

Military personnel (Note 11) .................... . 104.1 27.7 

Civilian employees ........................... . 25.7 28.7 

Social insurance ............................ . 115.9 106.1 

Veterans compensation ...................... . 20.3 36.9 

Other ..................................... . 37.0 35.6 

Interest ............ : ......................... . 48.3 39.2 

International affairs ............................ . 17.0 17.7 

National defense .............................. . 98.6 90.4 

Natural resources and environment ............... . 14.0 12.5 

Transportation ................................ . 15.8 14.7 

Veterans benefits and services ................... . 8.0 8.9 

Total .................................... . 652.2 558.9 

Current period results ..................... . $(122.8) $(91.1) 

The accompanying notes are an integral part of this statement. 
Summary of Expenses by Object and Agency 

1979 1978 

Expenses by object 

Salaries and employee benefits .................. . $78.2 $80.1 

Vendor services and supplies .................... . 93.5 87.6 

Depreciation ................................. . 20.6 19.4 

Pensions, health and life insurance ............... . 151.4 96.4 

Casualty insurance and indemnities ............... . 113.7 113.8 

Grants, subsidies, and contributions .............. . 146.5 122.4 

Interest ...................................... . 48.3 39.2 

Total .................................... . 652.2 558.9 -- --

Expenses by agency 

Legislative branch ............................. . 1.1 1.1 

Judicial branch ............................... . .6 .4 

Executive branch 

Office of the President ........................ . 12.1 13.6 

Departments 

Agriculture ............................... . 44.4 40.2 

Commerce ............................... . 4.5 5.6 

Defense ................................. . 191.7 113.4 

Energy .................................. . 6.6 5.1 

Health, Education, and Welfare ............... . 188.4 171.2 

Housing and Urban Development ............. . 14.0 12.0 

Interior .................................. . 5.1 4.9 

Justice .................................. . 3.1 3.2 

Labor ................................... . 24.1 25.0 

State .................................... . 1.7 1.4 

Transportation ............................ . 15.9 14.3 

Treasury: Interest ........................ . 48.3 39.2 

Other .......................... . 11.2 12.8 

Independent agencies ................ : ....... . 79.4 95.5 

Total .................................... . $652.2 $558.9 

The accompanying notes are an integral part of this statement. 

11 
12 

United States Government Consolidated Statement 

of Changes in Financial Position 

for the Years Ended September 30, 1979 and 1978 

[In billions] 

1979 

Cash and monetary reserves beginning of period ....... . $46.2 

Sources of funds: 

Taxes and other levies .......................... . 470.6 

Other Government operations .................... . 58.7 

Sale of property and equipment .................. . 20.3 

Net increase in borrowing ....................... . 32.7 

Depreciation ....... : ......................... . 20.6 

Provision for accrued pension, retirement, 

and disability plans .......................... . 115.9 

Provision for loss reserves for guarantee 

and insurance programs ...................... . (.9) 

Increase in liabilities ........................... . 21.6 

Total sources of funds ...................... . 785.7 

Uses of fL1nds: 

Spending on Government programs ............... . 652.2 

Purchase of property and equipment .............. . 52.0 

Increase in receivables ......................... . 21.2 

Increase in inventories .......................... . 6.8 

Increase in deferred charges and other assets ....... . 3.6 

Total uses of funds ........................ . 735.8 

Cash and monetary reserves end of period ............ . $49.9 

The accompanying notes are an integral part of this statement. 

1978 

$43.4 

414.2 

53.6 

17.4 . 

58.1 

19.4 

64.6 

.3 

11.7 

682.7 

558.9 

42.7 

29.8 

4.1 

1.0 

636.5 

$46.2 
Introductory Statement to Notes 

The Federal consolidated financial statements have been prepared to serve the common needs of a variety of users with emphasis on the general public. As is true of accounting 

in other types of entities, Governmental accounting exists for the purpose of providing complete and accurate financial information in a meaningful format and on a timely basis to 

those responsible for and concerned with the operations of government. This information 

can help promote a better understanding of the role of the Government's financial operations 

in the economy. 

The Advisory Committee on Federal Consolidated Financial Statements, which was 

chartered from March 1976 to March 1978, identified many of the major conceptual and practical problems associated with the development of the financial statements and schedules. 

On July 6, 1977, the Comptroller General assumed the chairmanship of the lnteragency Advisory Committee on Federal Consolidated Financial Statements whose role was to study the 

problems associated with implementing the recommendations resulting from the work of the 

Advisory Committee. 

The lnteragency Advisory Committee task groups have submitted their reports to Treasury for review and possible implementation. The next Treasury effort is to review these 

recommendations and identify what reporting requirements need to be changed or developed. A summary of the issues studied and the recommendations made by the task groups is 

presented below. 

• Accrual of taxes.-Presently, Federal tax revenues are accrued for corporate taxes, 

whereas individual taxes are recognized and reported on a cash basis. The objective 

was to further develop a method for accruing individual income taxes that takes into 

account taxes earned, refunds, and uncollectible amounts. Methodologies were 

developed by the task group for accruing individual taxes receivable on the consolidated statements. 

• Allowance for losses on accounts and loans receivable.-A significant number of 

agencies do not provide a reasonable estimate for losses, while others make no estimate at all; also, there is no universally prescribed method for determining what an 

allowance should be. The task group developed a series of recommendations to be 

acted on by Treasury, GAO, and 0MB to improve agency accounting practices in this 

area. 

• Asset valuation.-Presently, assets are accounted for on a historical cost basis; 

some assets have no recorded value. The task group recommended that Treasury 

continue to report assets on a historical cost basis and to supplement this information with a schedule measuring assets at current values and in constant dollars (in 

dollars each of which has the same general purchasing power). The task group provided methods for determining current values and constant dollars. It also identified 

several areas that need further study involving the implementation of current value accounting in the consolidated report. They are: depreciation, technological change, 

and purchasing power gains and losses. 

• Federal employee retirement systems and social security.-ln late 1978, Congress 

enacted Public Law 95-595, which recognized the need to have uniform accounting 

and reporting for Federal pension liabilities. This act superseded the work of the task 

13 
14 

group with respect to Federal pension plans. The act identified 38 plans which would 

be required to file an annual report. Annual pension reports were received from the 

Military Retirement and the Civil Service Retirement Systems for the plan year ended 

September 30, 1979. Accrued pension liabilities from the two reports are included in 

these statements. In future statements, Treasury will include additional reports received under Public Law 95-595. The task group report did not address the issues relating 

to social security due to the uniqueness of the actuarial cost methods used tor 

measuring benefits under the system. 

• Inflation accounting.-There is a recognized need to provide disclosure for the effect 

of inflation on accounting and reporting information. The task group objective was to 

determine the extent to which it is desirable and effective to account for the effects of 

inflation. However, due to the interrelationship between inflation accounting and certain current accounting valuations, it was decided to merge the activities of this task 

group with the asset valuation group. 

• Estimated losses on loan guarantees and insurance.-A number of agencies do not 

make any provision for estimated losses on loan guarantees and insurance, while 

others do not provide reasonable estimates of losses. The task group presented a 

number of recommendations on when and how losses should be determined. It also 

recommended changes to be made in displaying insurance and loan guarantee type 

programs in the consolidated statements. 
Notes to Financial Statements 

1. Summary of general accounting policies 

Principal financial statements.-These consist 

of a statement of financial position, a statement of 

operations, and a statement of changes in financial position. Because of their developmental 

nature, only the most significant changes in format are disclosed in the Notes. 

Principles of consolidation.-The statements 

include the accounts of all significant agencies 

and funds included in the unified budget of the 

U.S. Government. Agencies such as the U.S. 

Postal Service and the Federal Financing Bank, 

classified as off-budget (not included in calculating the budget surplus or deficit), have also been 

included in the statements because they are wholly owned and are clearly within the scope of 

Government operations. Government-sponsored 

enterprises such as the Federal land banks are excluded because they are privately owned. The 

Federal Reserve System is also excluded. Intragovernmental transactions were eliminated in 

consolidation. 

Fiscal year.-The fiscal year of the U.S. Government ends on September 30. 

Reclassification and adjustment.-For comparability, certain fiscal 1978 data are reclassified 

where appropriate to conform to the financial 

statement presentation for fiscal 1979. 

2. lntemational monetary reserves 

This category, as of September 30, 1979, comprises the following items: $11.2 billion in gold, 

recorded at $42.22 per ounce, the statutory price at 

which gold is monetized by the issuance of gold 

certificates to the Federal Reserve System; $2.7 

billion of special drawing rights, an international 

reserve asset; and $1.3 billion representing the 

U.S. reserve position in the International Monetary 

Fund. 

3. Accrued taxes receivable 

The September 30, 1979, total for taxes receivable represents $10.9 billion (net) for delinquent 

taxes and $15.8 billion of accrued corporate taxes. 

On July 23, 1980, the task group on taxes receivable presented its findings. Two methodologies 

were developed for accruing individual taxes 

receivable. Treasury will be reviewing these 

methodologies and considering them for inclusion 

in future reports. 

4. Loans receivable 

Outstanding loans and allowances for losses 

have been recorded as reported by the various 

lending agencies. The allowances for losses are 

presumed to be understated and they are under 

study. Interest rates and loan repayment terms 

vary considerably for outstanding loans, with rates 

up to 12 percent and terms from as short as 90 

days to well over 40 years. 

5. Inventories 

Inventories include nondepreciable personal 

property and are generally stated at cost. The September 30, 1979, total for inventories comprises 

$53.3 billion for the Department of Defense and 

$21.3 billion for other agencies. The amounts as of 

September 30, 1978, were $50.3 billion and $17.6 

billion, respectively. The inventory accounts do 

not include the weapons stockpile since the extent of the inventory is classified information. 

6. Land 

Land is valued at the cost paid by the Government. The cost of land acquired through donation, 

exchange, bequest, forefeiture, or judicial process 

is estimated by the General Services Administration at amounts the Government would have paid 

if purchased at the date of acquisition. Pending 

study of valuation methods, the Outer Continental 

Shelf and other offshore lands, and the 712 million 

acres of public domain lands have not been included. In 1972 a committee of the House of 

Representatives estimated the value of public domain land (92 percent of the total onshore average 

owned by the Federal Government) to be $29.9 

billion. 

7. Buildings, structures, and facilities 

This category consists of all real property owned by the Federal Government except land. The 

total reflects the acquisition cost of buildings and 

15 
the cost of acquiring or erecting dams, utility systems, monuments, roads, and bridges. The September 30, 1979, total represents $47.8 billion for 

the Department of Defense and $64.5 billion for 

other agencies. The amounts as of September 30, 

1978, were $46.5 billion and $63.7 billion, 

respectively. 

8. Depreciable personal property 

Military hardware and equipment are recorded 

at acquisition cost and include only depreciable 

property currently in use or in usable condition. 

The major components of each category are summarized below. 

Military hardware 

Aircraft and related 

equipment ......... . 

Ships and service 

craft .............. . 

Combat and tactical 

vehicles ........... . 

Missiles and related 

equipment ......... . 

Other ................ . 

Total .............. . 

Equipment 

Department of Defense 

Industrial plant 

equipment ....... . 

Communications and 

electronics ....... . 

Other .............. . 

Other agencies ........ . 

Total ............ . 

9. Accumulated depreciation 

1979 1978 

[In billions] 

$63.1 

51.3 

27.2 

14.3 

2.9 

$158.8 

$16.7 

3.7 

8.5 

28.9 

25.5 

$54.4 

$63.0 

46.6 

21.9 

13.3 

7.5 

$152.3 

$12.5 

3.8 

6.0 

22.3 

23.6 

$45.9 

Most Government agencies do not calculate 

depreciation on property and equipment; therefore, accumulated depreciation is estimated on a 

straightline basis, from available information. The 

useful lives applied to each classification of asset 

are as follows: Buildings, structures, and facilities-SO years; ships and service craft-30 years; 

industrial plant equipment-20 years; all other 

depreciable assets-10 years. 

10. Borrowing from the public 

As of September 30, 1979, the gross amount of 

16 

Federal debt outstanding net of unamortized premiums and discounts was $828.5 billion. This 

amount is reduced by $189.1 billion for intragovernmental holdings. As of September 30, 1979, foreign and international investors held approximately $125 billion of the debt outstanding with 

the public. The amount as of September 30, 1978, 

was $121 billion. For additional information on 

borrowing from the public, see the Federal Debt 

Maturity schedule in the supplemental section 

(page 33). 

11. Accrued pension, retirement, and disability 

plans 

The accounting for accrued pension, retirement, 

and disability plans is subject to several different 

assumptions, definitions, and methods of calculation. Each of the major plans is summarized 

below. 

Military personnel and civilian employees: Accrued pension liabilities for September 30, 1979, 

were calculated in accordance with instructions 

developed jointly by the General Accounting Office and the Office of Management and Budget 

under the provisions of Public Law 95-595. In addition to accrued vested benefits which were included in the 1978 liabilities, the 1979 liabilities include 

estimates of accrued nonvested benefits and an 

increase in the estimated long-term rate of inflation. This change in accounting methods increased the liability for the Military Retirement System 

by $62.6 billion and the Civil Service Retirement 

System by $182.6 billion for a total increase of 

$245.2 billion. 

As comparable data was not available as of 

September 30, 1978, Treasury was not able to accurately determine the expense applicable to the 

current year. Therefore, the $245.2 billion increased pension liability was accounted for by adjusting the accumulated position at the beginning of 

the period in lieu of charging the entire amount to 

fiscal year 1979 or amortizing it over an extended 

period. 

Additionally, the expense for the military personnel income security increased from $27.7 

billion in 1978 to $104.1 billion in 1979 due to a 

reevaluation by the Department of Defense of the 

actuarial assumptions prior to application of 

Public Law 95-595. 

Social security: Based on the present value of 

the projected excess of benefits over contributions for present participants for the next 75 years. 

On December 20, 1977, Public Law 95-216 amended the Social Security Act resulting in changes to 

the estimates of future benefits and contributions. 
It has not yet been determined whether the requirements for Federal pension plans, established 

as a result of Public Law 95-595, should be applied to the Social Security System due to the uniqueness of the actuarial cost methods used for 

measuring benefits under the system. 

Veterans compensation: Represents the present value of annual benefit payments. 

Federal employees compensation: Represents 

estimated future costs for approved Federal 

Employees Compensation Act cases. 

As annual pension reports are received from 

other plans covered by Public Law 95-595, their 

pension liability amounts will also be included. 

For additional information on accrued pensions, see Analysis of Pension and Retirement 

Plans schedule in the supplemental section 

(page 34). 

12. Loss reserves for guarantee and insurance 

programs 

For additional information on loss reserves for 

guarantee and insurance programs, see the Commitments and Contingencies of the U.S. Government schedule in the supplemental section 

(page 32). 

13. Prior period adjustment 

The balance of accumulated position at September 30, 1978, has been restated from the 

amount previously reported to reflect the cumulative effect of corrections for errors identified in fiscal 1979. The inventory of stockpiled materials and 

commodities was overstated by $14.0 billion at 

September 30, 1978, and $13.2 billion at September 30, 1977. 

14. Current noncash provision for social security 

The noncash provision for social security represents changes in the social security .accrued liability between periods based on a 30-year amortization of the actuarial deficit. Accounting methods 

for the provision require additional study .. 

The noncash amount is not included in the 

Statement of Operations because a substantial 

but indeterminate portion is not applicable to the 

current period. The Statement of Operations does 

include cash benefit payments. 

On November 4. 1978, Public Law 95-595 

amended the Social Security Act resulting in changes to the estimate of future benefits and contributions. Because of the new basis for calculating 

the liability, the figures shown in this report are not 

comparable to those shown in prior years. The current noncash provision for social security is $134.0 

billion in 1979. 

15. Contingencies 

Several Government agencies insure businesses and individuals against various types of risks. 

The amount of insurance coverage in force, representing the maximum risk exposure to the Government, is $2,023.3 billion as of September 30, 1979. 

The Government also guarantees loans by nonGovernment enterprises to businesses and individuals. These guarantees become liabilities of the 

Government only when it fs required to honor its 

guarantees. Loan guarantees in force at September 30, 1979, are $282.7 billion. For further information on contingencies, see the Commitments and 

Contingencies of the U.S. Government schedule in 

the supplemental section (page 32). 

16. Open-ended programs and fixed costs 

The Government also commits itself to provide 

services by passing laws that make spending 

mandatory. Since a significant amount of future 

spending is fixed by law, it is very probable that 

the Government will pay for these programs in 

future years. Listed below are the programs for fiscal 1979 that can be terminated only if the laws are 

changed. 

Payments for individuals 

Social security and railroad 

retirement ................. . 

Federal employees retirement 

and insurance .............. . 

Unemployment assistance ...... . 

Assistance to students ......... . 

Food and nutrition assistance ... . 

All other ..................... . 

Medicare and Medicaid ......... . 

Housing payments ............ . 

Public-assistance-related 

programs .................. . 

Net interest .................... . 

General revenue sharing .......... . 

Other open-ended programs and 

fixed costs ................... . 

Total .................... . 

1979 

[In billions] 

$106.7 

30.0 

10.7 

2.8 

9.8 

2.7 

41.6 

4.2 

16.4 

224.9 

42.6 

6.8 

11.7 

$286.0 

17 
Alternative 

Financial Statement Formats 
20 

United States Government 

Consolidated Statement of Selected Current Assets and Liabilities 

as of September 30, 1979 and 1978 

[In billions] 

Current Assets 

(What the Government owns-resources that approximate amounts 

available to pay liabilities or to provide public service in the next year) 

1979 

Cash and monetary reserves 

Operating cash in the Treasury ........ .- .......... . $24.2 

International monetary reserves .................. . 15.2 

Other cash ................................... . 10.5 

49.9 

Receivables (net of allowances) 

Accounts receivable ........................... . 9.2 

Accrued taxes receivable ....................... . 26.7 

Loans receivable .............................. . 29.7 

Advances and prepayments ..................... . 3.4 

69.0 

Total: Current assets ....................... . $118.9 

Current Liabilities 

(What the Government owes-amounts incurred in the 

past that will require cash or other resources in the next year) 

Accounts payable ............................... . $77.7 

Borrowing from the public ......................... . 342.9 

Accrued pension, retirement, and 

disability plans ................................ . 146.8 

Total: Current liabilities ..................... . 567.4 

Excess of current liabilities over current assets ........ . $448.5 

1978 

$22.4 

18.8 

5.0 

46.2 

7.7 

24.0 

27.4 

5.2 

64.3 

$110.5 

$65.8 

315.3 

130.0 

511.1 

$400.6 
,,} '\ 

' \j t 

J 

United States Government 

Consolidated Statement of Other Assets 

as of September 30, 1979 and 1978 

[In billions] 

(Resources that generally would not be liquidated 

to finance operations in the next year) 

Loans receivable (net of allowances) ................ . 

Inventories (at cost) 

Goods for sale ................................ . 

Work in process ............................... . 

Raw materials ................................ . 

Materials and supplies for Government use ......... . 

Stockpiled materials and commodities ............. . 

Property and equipment 

Land ............. .- .......................... . 

Buildings, structures, and facilities ................ . Military hardware .............................. . 

Equipment ................................... . Construction in progress ........................ . 

Other ....................................... . 

Accumulated depreciation ...................... . 

Deferred charges and other assets .................. . 

Total: Other assets ......................... . 

1979 

$109.1 

15.4 

1.0 

3.6 

40.5 

14.1 

74.6 --

. 9.3 

112.3 

158.8 

54.4 

25.5 

1.6 

(180.4) 

181.5 

28.0 

$393.2 

1978 

$92.6 

16.1 

.9 

2.0 

35.2 

13.7 

67.9 

9.1 

110.2 

152.3 

45.9 

21.1 

1.7 

(170.0) 

170.3 

24.4 

$355.2 

21 
22 

United States Govemment 

Consolidated Statement of Other Liabilities 

as of September 30, 1979 and 1978 

[In billions] 

(Amounts owed that will not fall due in the next year) 

1979 

Unearned revenue ............................... . 

Borrowing from the public ......................... . $14.8 

296.5 

Accrued pension, retirement, and disability plans 

Military personnel ............................. . 291.9 

Civilian employees ............................. . 355.4 

Social security ................................ . 940.4 

Veterans compensation ........................ . 153.0 

federal employees compensation ................ . 8.7 

Loss reserves for guarantee and 

insurance programs ............................ . 

1/49.4 

2.3 

Other liabilities ................... , .............. . 51.4 

Total: Other liabilities ....................... . $2,114.4 

1978 

$11.3 

291.4 

199.9 

344.3 

820.2 

143.9 

8.1 

\516.4 

3.2 

45.2 

$1,867.5 
United States Government 

Consolidated Statement of Changes in the 

. : Operating Cash Balance 

for the Years Ended September 30, 1979 and 1978 

[In billions] 

Operating cash beginning of period ................. . 

Sourc.es of cash: 

· Budget receipts .. : .......................... . 

Net borrowing from the public1 •••••••••••••••••• 

Other means of financing2 ••••••••••.••••••••••••. 

Total ............................ ; ..... . 

Uses of cash: 

Budget outlays .............................. . 

Off-budget outlays ............................ · . · 

Total .................................. . 

Operating cash end of period ..... , ................ . 

.. 

1 Reconciliation of net borrowing from the public: 

1979 

$22.4 

465.9 

33.6 

7.9, 

529.8 

493.2 

12.4 

505.6 

$24.2 

Current Other 

Balance as of 9/30/79. . . . . . . . . . . . . . . . . $342.9 $296.5 

Balance as of 9/30/78. . . . . . . . . . . . . . . . . 315.3 291.4 

Net borrowing per Federal Debt Maturity (Sch. V) ............. · ... . 

Adjustment for deferred discounts and premiums, 

and certain intergovernmental transactions .................. . 

Net borrowing from the public ........................... . 

1978 

$19.1 

402.0 

59.1 

~-

· 483.5 

450.8 

10.3 

461.1 

$22.4 

Total 

$639.4 

606.7 

32.7 

.9 

$33.6 

2 lnciudes the net change in: Special drawing rights, other assets, accrued interest 

payable to the public, checks outstanding, other liabilities, and other transactions 

not applied to surplus or deficit. 

23' 
Supplemental Schedules 
26 

Introductory Statement to the Schedules 

The following schedules present information which in some cases is unique to the Federal Government or is not generally shown as a part of published financial statements. The information in the schedules reflects various operations of the Government under laws passed 

by the Congress, and in some cases shows the financial costs to the Government of providing benefits through the tax system or through other indirect means as opposed to direct 

Federal revenue collection or spending. 

There are certain schedules that are incomplete. As a prototype, this report attempts to 

show what is planned with regard to providing a comprehensive overview of Federal financial 

operations. In some cases the schedules support the financial results shown in the consolidated financial statements; in others there is little relationship between the schedules and 

the statements. Consequently, each of the tables should be considered individually as a 

specialized information source. 

The following schedules are presented in this section: 

Flow of Funds Projections 

The information in this schedule was obtained from the 1981 Budget of the U.S. Government prepared by the Office of Management and Budget. It presents actual and projected 1980-83 cash receipts and outlays. Although the consolidated financial statements are prepared on an accrual basis and reflect historical financial data, no attempt 

has been made here to develop projections on an accrual basis. The data presented here 

also differ from the statements in that certain receipts are treated as reductions of outlays, according to conventions adopted for budgeting purposes. 

These projections are not forecasts of future receipts and outlays, nor are they recommendations for policy-setting purposes. They simply reflect what may happen to cash 

basis revenues and expenditures considering certain basic assumptions reflected in the 

budget. The receipts projections are consistent with the continuation of current tax laws 

as modified in the 1981 Budget. Outlay estimates indicate the degree to which resources 

• would be committed by the continuation of existing and currently proposed programs 

through fiscal 1983. 

II Financial Statements of the U.S. Government Restated for General Price-Level Changes 

This schedule is developed from the Statement of Financial Position and Statement 

of Operations. Historical values have been restated to account for changes in the general 

purchasing power of the dollar. Accounting for inflation by this method provides comparability between years, since all dollars are equivalent to the current level of purchasing 

power. This restatement generally follows the Financial Accounting Standards Board 

Statement No. 33, "Financial Reporting and Changing Prices." 

Derived from the GNP implicit price deflater, the conversion factors used here are: 

fiscal 1979-1.032; fiscal 1978-1.089; fiscal 1977-1.198; transition quarter-1.250; fiscal 

1976-1.279; and fiscal 1975-1.365. Monetary assets and liabilities as of September 30, 

1979, are not restated because they already represent dollars of current general purchasing power. 
Ill Effect of Tax Benefits on Federal Revenues 

The Effect of Tax Benefits on Federal Revenues schedule is designed to show the 

revenue losses attributable to tax law provisions that allow special exclusions, exemptions, or deductions from gross income or provide special credits, tax rates, or deferrals. 

The schedule shows the approximate cost of tax benefits. 

It should be noted that the effect on revenues of adding or deleting a particular tax 

benefit would not be the same as the dollar amount currently associated with the benefit. 

Consequently, it is not possible to say what the effects of increasing or decreasing 

selected benefits would be without considering a number of variables. 

Some minor distortions may have occurred since data presented have been condensed for purposes of this report. 

IV Commitments and Contingencies of the U.S. Government 

The Commitments and Contingencies schedule is designed to show two basic 

types of financial information. These are the maximum potential liabilities and the anticipated liabilities which it is reasonably certain, based on experience and other factors, will 

occur. The anticipated liabilities are the equivalent to allowance for losses. 

As used in commercial accounting, a commitment represents an obligation to pay 

for goods or services upon delivery under a contractual arrangement. Commitments 

shown here are represented by long-term contracts for which appropriations have not yet 

been provided by the Congress, and undelivered orders representing obligations of currently available appropriations. 

A contingency represents a possible exposure to a liability depending upon the outcome of uncertain future events or circumstances. Contingencies are stated in terms of 

the maximum risk exposure without regard to existing contingent assets which would be 

available to offset potential losses. The "ratio of losses incurred to premiums written" 

represents the probability of incurring those losses. "Loss reserves" supports the 

balance sheet liability "loss reserves for guarantee and insurance programs" and represents the anticipated liability. 

V Federal Debt Maturity 

The Federal Debt Maturity sched1,1le reflects information on the borrowing of the 

Federal Government needed to financ~ the Government's operations. 

Information on the debt is provided by type of debt instrument, average interest rate 

charged for each type, and maturity. This schedule directly supports the balance sheet 

caption, "Borrowing from the public," which is shown net of intragovernmental holdings 

and unamortized premium or discount. lntragovernmental holdings represent that portion 

of _the total Federal debt held by Federal entities, including the major trust funds. 

VI Additions to Non-Federal Economic Resources 

This schedule indicates the ways in which the Government uses its resources to add 

to the physical and human resources of the Nation without acquiring physical assets. 

Some of these investment-type expenditures, while not adding to the Federal assets, add 

to the assets of State and local government or private institutions, and all enhance the 

future productivity 9f the Nation. 

While this schedule does not provide a precise measure of the difference between 

capital and current items, it does indicate a useful general magnitude. 

Additions to State, local, and private assets include construction grants for highways, hospitals, and airports, subsidies to the merchant fleet, and conservation projects, 

which increase the value of private farmland and water resources. Other developmental 

27 
28 

expenditures reflect current Federal expenditures and grants which will benefit the Nation in future years by increasing productivity or well-being. These include research and 

development costs and education and training. 

VII Analysis of Pension and Retirement Plans 

The Analysis of Pension and Retirement Plans schedule is designed to provide an insight into the size of these programs and associated future financing requirements as of 

September 30, 1979, for all Government-financed plans. Amounts for social security, military personnel, civilian employees, and other plans support the liabilities on the Consolidated Statement of Financial Position. The second and third parts of this schedule provide information on cash flows and benefits paid to pensioners. 

To the extent that information for this schedule was available, it was obtained from 

direct contact with actuaries for the respective agencies, from published Treasury 

Department reports, and from annual reports filed with the General Accounting Office 

under Public Law 95-595. The schedule is incomplete in that the number of plans ultimately to be included in the schedule is not yet resolved-as many as 38 separate plans 

might be included. GAO has developed instructions regarding the information to be contained in and the format to be used in the annual reports. Figures developed under the 

GAO guidelines have been used in this schedule for 1979. 

VIII Estimated Interest Subsidy on Direct Loans Outstanding 

Government public policy objectives are achieved in this area by providing credit for 

private borrowers and Government corporations on more favorable terms than are available to the Treasury. Many programs do not involve subsidies. This schedule attempts to 

measure the difference between what the Government has to pay to borrow funds to support its general operations and the interest an agency charges a borrower. This schedule 

is being developed using gross loans receivable as a basis; therefore, it does not take into 

account allowances for losses and does not eliminate intragovernment loans. The 

schedule shows the annual and total costs to the Government for all significant loan subsidy programs. Computations are based on (1) the average life of the loan, which represents the average number of years for repayment of each type of loan; (2) the Treasury 

borrowing rate for comparable maturities, which is based on the rates that the Treasury 

had to pay on interest-bearing public debt at the time the loan was made to the borrower; 

(3) the rate charged to the borrower, which is the average interest rate charged for each 

program; and (4) the total amount to subsidized loans outstanding, which covers the total 

amount of loans subsidized by the Treasury. 

Foreign subsidy information, supplied by the Treasury's Office of Economic Policy 

pursuant to section (f) of the Foreign Assistance Act, provides an improved picture of foreign loan subsidies. This schedule is a rough approximation of the costs of these programs to the Government. The lack of specific information on comparable maturities of 

public debt securities distorts the true cost. Additionally, while the schedule recognizes 

only annual interest costs, a more precise reading on the costs associated with the 

specific loan programs would require capitalizing the cost at the time the loans are made. 

The feasibility of these refinements is under consideration. 

IX Federal Facts and Figures 

The schedule is designed to provide readers of the financial statements and schedules a set of recognizable benchmarks to use in maki.ng comparisons and identifying 

any relationships. Major emphasis has been given to providing information on the gross 

national product, the Consumer Price Index, employment, Federal debt, Federal expenses, and personal income taxes. In all cases the most current data available have 

been provided. 
SCHEDULE I 

Flow of Funds Projections 

for the Years Ended 

September 30, 1979-83 

[In billions] 

1979 1980 

Cash receipts 

Taxes 

Individual ......................... . 

Corporation ........................................... . 

Social insurance taxes and contributions 

Employment taxes and contributions ..................... . 

Unemployment insurance ............................. . 

Contributions for other insurance and retirement ............ . 

Excise taxes ............................................. . 

Estate and gift taxes ..................................... . 

Customs duties ...................................... . 

Miscellaneous . . . . . . . . . . . . ...................... . 

Rents and royalties ....................................... . 

Total cash receipts. . . . . . . . . . . . . . ............. . 

Cash outlays by function 

Administration of justice .................................. . 

Agriculture ............................................. . 

Allowance and civilian pay raises and contingencies ...... . 

Commerce and housing credit ............................. . 

Community and regional development. ................ . 

Education, training, employment, and social services ........ . 

Energy ................................................. . 

General government. . . . . . . . . . . . . ................. . 

General science,space,andtechnology ..................... . 

General purpose fiscal assistance .......................... . 

H~~---··············································· 

Income security ......................................... . 

Interest . . . . . . . . ................................ . 

International affairs .................................. . 

National defense ................................... . 

Natural resources and environment. ........................ . 

Transportation .......................................... . 

Veterans benefits and services ............................. . 

Total cash outlays ..................................... . 

Total budget surplus (deficit) ........................... . 

Deficit, off-budget Federal entities ............................ . 

Total surplus (deficit).... . ............. . 

• Less than $100 million. 

Source: Budget of the United States Government, Fiscal Year 1981. 

. Actual 

$217.8 $238.7 

65.7 72.3 

120.1 138,6 

15.4 16.9 

6.1 6.7 

18.7 26.3 

5.4 5.8 

7.4 7.6 

24.5 28.4 

3.3 4.8 

484.4 546.1 

4.1 4.5 

6.2 4.6 

2.6 5.5 

9.5 8.5 

29.7 30.7 

6.8 7.7 

4.1 4.9 

5.0 5.9 

8.4 8.7 

49.6 56.6 

160.2 190.9 

52.6 63.3 

6.1 10.4 

117.7 130.4 

12.1 12.8 

17.5 19.6 

19.9 20.8 

512.1 585.8 

(27.7) (39.7) 

(12.5) (16.8) 

$(40.2) $(56.5) 

1981 1982 1983 

Estimate 

$274.4 $318.7 $381.4 

71.6 80.6 91.8 

161.6 187.2 211.7 

18.7 21.1 23.5 

7.1 7.6 8.1 

40.2 48.0 51.7 

5.9 6.4 7.1 

8.4 8.6 9.2 

31.2 33.5 36.1 

6.0 6.0 6.0 

625.1 717.7 826.6 

4.7 4.9 5.0 

2.8 3.0 3.9 

2.6 9.8 36.5 

1.0 3.2 3.1 

8.8 9.4 9.9 

32.0 35.0 37.7 

8.1 11.0 13.5 

4.9 5.1 5.1 

6.4 6.9 7.0 

9.6 9.7 9.3 

62.5 70.8 79.9 

220.0 241.7 264.0 

67.2 68.0 68.3 

9.4 10.2 11.2 

146.2 165.5 185.9 

12.8 13.7 14.1 

20.2 21.6 23.2 

21.7 23.2 24.6 

640.9 712.7 802.2 

(15.8) -s:o ~ 

(18.1) (15.1) (12.9) 

$(33.9) $(10,1) $11.5 

29 
Financial position 

Assets 

SCHEDULE II 

Financial Statements of the 

U.S. Government 

Restated for General Price-Level Changes 

(Restated to September 30, 1979, Dollars) 

[In billions] 

Cash and monetary reserves ............................................................... . 

Receivables (net of allowances) ............................................................ . 

Inventories (at cost) ...................................................................... . 

Property and equipment (net of accumulated depreciation) ..................................... . 

Deferred charges and other assets .......................................................... . 

Total assets ......................................................................... . 

Liabilities 

Accounts payable ........................................................................ . 

Unearned revenue ........................................................................ . 

Borrowing from the public .................................................................. . 

Accrued pension, retirement, and disability plans ............................................. . 

Loss reserves for guarantee and insurance programs .......................................... . 

Other liabilities .......................................................................... . 

Total liabilities ...................................................................... . 

Accumulated position 

Accumulated position beginning of period ..................................................... . 

Prior period adjustment. ............................ .-....................................... . 

Restated accumulated position beginning of period ............................................. . 

Current period results ...................................................................... . 

Current noncash provision for social security ............................ · ....................... . 

Accumulated position end of period .......................................................... . 

Total liabilities and accumulated position ............................................... . 

Operating results 

Revenues 

Taxes and duties ........................................................................ . 

Business-type operations ................................................................. . 

Total revenues ...................................................................... . 

Expenses 

Administration of justice .................................................................. . 

Agriculture ............................................................................. . 

Commerce and housing credit ............................................................. . 

Community and regional development ...................................................... . 

Education, training, employment, and social services .......................................... . 

Energy ................................................................................. . 

General government ..................................................................... · .. 

General purpose fiscal assistance .......................................................... . 

General science, space, and technology ..................................................... . 

Health ............................ · ..................................................... . 

Income security ......................................................................... . 

Interest ..................................................................... • ....... •• .. 

International affairs ...................................................................... . 

National defense ........................................................................ . 

Natural resources and environment ......................................................... . 

Transportation .......................................................................... . 

Veterans benefits and services ............................................................. . 

Total expenses .... · .................................................................. . 

General price-level gain ................................................. : ................... . 

Current period results ................................................................ . 

1979 1978 1977 

1979 

Sept. 30 

$49.9 

178.1 

77.0 

252.5 

37.2 

$594.7 

$77.7 

19.3 

639.4 

1,896.2 

3.0 

51.4 

2,687.0 

(2,006.4) 

(15.2) 

(2,021.6) 

67.5 

(138.2) 

(2.092.3) 

$594.7 

1976 

$485.7 

60.7 

546.4 

4.0 

6.1. 

1.3 

9.9 

27.2 

8.8 

14.0 

18.0 

5.4 

57.5 

312.7 

49.8 

17.5 

101.8 

14.4 

16.3 

8.3 

673.0 

194.1 

$67.5 

Sept. 30 Sept. 30 Sept. 30 Sept. 30 June 30 

Comparative summary of selected financial data 

Financial position 

Total assets .............................. . 

Total liabilities ............................ . 

Accumulated position end of period ...... . 

Operating results 

Total revenues ......... : .................. . 

Total expenses ............................ . 

General price-level gain ..................... . 

Current period results .................. . 

30 

$594.7 $572.5 

2,687.0 2,594.1 

$(2,092.3) $(2,021.6) 

$546.4 $524.8 

673.0 627.1 

194.1 145.3 

$67.5 $43.0 

$543.0 $526.3 $527.3 

2,487.2 2,308.3 2,272.2 

$(1,944.2) $(1,782.0) $(1,744.9) 

$475.1 $126.4 $526.6 

540.1 172.1 629.5 

90.9 17.4 82.1 

$25.9 $(28.3) $(20.8) 

1978 

Sept. 30 

$50.3 

170.9 

76.6 

241.3 

33.4 

$572.5 

$71.7 

· 15.6 

660.7 

1,792.8 

4.1 

49.2 

2,594.1 

(1,908.5) 

(15.2) 

(1,923.7) 

43.0 

(140.9) 

(2,021.6) 

$572.5 

$464.7 

60.1 

524.8 

4.0 

8.0 

2.7 

12.5 

27.7 

7.4 

12.9 

21.0 

4.9 

56.5 

263.7 

44.0 

19.9 

101.4 

14.0 

16.5 

10.0 

627.1 

145.3 

$43.0 

1975· 

June 30 

$493.6 

2,079.9 

$(1,586.3) 

$416.6 

497.8 

132.1 

$50.9 
Individuals 

Income exclusion 

SCHEDULE Ill 

Effect of Tax Benefits on Federal Revenues 

for Tax Years 1979 and 1978 

[In billions] 

Payroll benefits and allowances (group life, accident, and unemployment) .................................. . 

Disability and retirement benefits (social security and private) ............................................ . 

Education allowances (scholarships and GI benefits) .............................................•...... 

Medical care and insurance (employer premiums paid) .................................................. . 

Interest and dividends (State and local bonds, and life insurance) ......................................... . 

Foreign earnings and investment incentives (income earned abroad) ...................................... . 

Capital gains at death ............................................................................. . 

Other (includes real estate, old-age credit on home sales, and cooperatives) ................................ . 

Income deferrals 

Interest on U.S. savings bonds ...................................................................... . 

Real estate (home sales) ............................ · ............................................... . 

Deductions and credits 

Old-age, disability, and other personal exemptions ..................................................... . 

Investments (commercial capital gains, depreciation, credits, and other investment incentives) ................ . 

State and local nonbusiness, property, and other taxes ................................................... . 

Property damages and losses (casualty losses) ........................................................ . 

Medical ......................................................................................... . 

Contributions (charitable and political) ............................................................... . 

Interest (mortgage and consumer) ................................................................... . 

Dependent care and work incentives (child and dependent care) .......................................... . 

Real estate (new home purchases) .............................................................. , .... . 

Earned income ................................................................................... . 

Corporations 

Income exclusions 

Interest and dividends (State and local debt) ........................................................... . 

Foreign earnings and investment incentives (domestic, international sales, Western Hemisphere trade, 

and controlled foreign corporations) ............................................................... . 

Interest deferrals 

Taxes (shipping companies) ........................................................................ . 

Real estate (capital gains) .......................................................................... . 

Deductions and credits 

Exemptions (credit unions, corporate surtax, and cooperatives) ........................................... . 

Investments 

Commercial buildings and equipment (investment credit, depreciation, construction period interest, 

and expensing developmental costs) ............................................................. . 

Mining and timber (capital gains treatment of royalties and certain income) .............................. . 

Agriculture related (capital outlays and gains on certain income) ....................................... . 

Contributions (charitable and political) ............................................................... . 

Work incentives (employment credits under work programs) ............................................. . 

Employee stock ownership plans (funded through investment and tax credits) .............................. . 

Excess bad debt reserves (financial institutions) ....................................................... . 

Source: Budget of the United States Government, Fiscal Year 1981. 

Estimated amount 

of revenue loss 

1979 1978 

$3.2 $2.5 

25.0 22.4 

.3 ,.3 

11.1 7.1 

6.0 5.0 

.5 .6 

4.4 8.1 

.3 .1 

.5 .6 

1.1 1.0 

4.1 3.4 

17.1 12.7 

19.7 16.4 

.5 .4 

3.2 2.8 

6.9 ~-6 

13.8 9.9 

.7 .6 

.3 .3 

4.1 3.6 

2.5 2.3 

.1 .1 

.7 .5 

7.0 5.8 

20.9 17.2 

.6 .3 

.1 .1 

.9 .8 

1.2 1.5 

.7 .3 

.8 .8 

31 
SCHEDULE IV 

Commitments and Contingencies 

of the U.S. Govemment 

as of September 30, 1979 

[In billions] 

Commitments 

Long-term contracts 

Shipbuilding ...................................... · .................................................. . 

GSA building construction ............................................................................. . 

Energy ............................................................................................. . 

Other ............................................................................................... . 

Subtotal ........................................................................................ . 

Undelivered orders 

Legislative branch .................................................................................... . 

Judicial branch ...................................................................................... . 

Executive Office of the President ....................................................................... . 

Funds appropriated to the President .................................................................... . 

Defense ............................................................................................ . 

Health, Education, and Welfare ......................................................................... . 

Housing and Urban Development ....................................................................... . 

Transportation ....................................................................................... . 

Environmental Protection Agency ....................................................................... . 

Other agencies ...................................................................................... . 

Off-budget agencies .................................................................................. . 

Subtotal ........................................................................................ . 

Total commitments ............................................................................. . 

Contingent liability 

(maximum risk 

exposure) 

Ratio of 

losses incurred 

to premiums 

written 

Contingencies 

Government loan and credit guarantees 

Hou~ng ....................................................... . 

Export-Import Bank of the United States ............................ . 

Business loan and investment fund ................................ . 

Farm ownership ................................................ . 

Rural development .............................................. . 

Shipbuilding and operations ...................................... . 

Transportation ..............................................•.... 

Veterans benefits ............................................... . 

Other .......................................................... . 

Subtotal ................................................... . 

Insurance in force 

Federal Deposit Insurance Corp ................................... . 

Federal Savings and Loan Insurance Corp ........................... . 

Federal Insurance Administration ................................. . 

Nuclear Regulatory Commission .................................. . 

National Credit Union Administration .............................. . 

Veterans Administration ......................................... . 

Department of Transportation ..................................... . 

m~ .......................................................... . Subtotal ................................................... . 

Unadjusted claims 

Transportation .................................................. . m~ .......................................................... . Subtotal ................................................... . 

Other contingencies 

Veterans readjustment benefits ................................... . Other ............................................. · ............. . 

~~~ ................................................... . 

Total contingencies ....................................... . 

Total loss reserves ........................................ . 

Less than $100 million. 

Less than one-tenth of 1 percent. 

32 

$156.9 

4.9 

8.4 

14.9 

25.9 

6.5 

2.3 

42.6 

~ 

20.3 

762.7 

453.3 

437.4 

99.1 

47.7 

33.2 

158.0 

31.9 

2,023.3 

7.7 

~ 

11.9 

8.8 

9.6 

18.4 

$2,344.0 

3% 

4.8 

1.1 

.1 

1.5 

.4 

1.3 

.2 

Amounts 

outstanding 

$4.6 

2.2 

10.2 

3.3 

2().3 

.1 

15.6 

40.4 

19.8 

207.8 

21.7 

12.0 

34.8 

3.0 

355.2 

$375.5 

Loss 

reserves 

$0.6 

.4 

.2 

.3 

1.5 

.3 

.1 

.4 

-.-8 

$2.3 
SCHEDULE V 

Federal Debt Maturity 

as of September 30, 1979 

[In billions] 

Maturity 

Total 

debt 

Marketable 

Bills ........................... . $157.6 

Notes ......................... . 272.0 

Bonds ......................... . 

~ 

60.9 

Non marketable 

Foreign government series ....... . 28.2 

Government account series ....... . 1.7 

Investment series ............... . .2 

U.S. savings bonds .............. . 80.4 

Other .......................... . 25.2 

135.7 

Other 

Agency securities ............... . 5.7 

Other ....................... •.•. 

~ 

7.5 

Net borrowing from the public 

Current period .................. . 639.4 

Prior period .................... . 606.~ 

Net increase ...................... . ~ 

Average Within 

interest 1 1-5 

rate year years 

10.111% $157.6 

8.046 81.8 $147.7 

7.342 1.8 6.1 

. 8.605 241:2 ~ 

7.542 9.8 13.9 

5.949 ·.6 

2.750 .2 

5.431 4.2 19.7 

6.216 

6.017 ~ ~ 

5.937 .2 1.1 

~ --.2- --1-.1-

256.2 188.5 

236.7 214.4 

$19.5 $(25.9) 

SCHEDUl,.E VI 

Additions to Non-Federal 

. Economic Resources 

5-10 

years 

$42.5 

2.0 

----«T 

4.5 

.9 

2.~ 

~ 

1.3 

--1-.3-

53.7 

37.5 

~ 

for the Years Ended September 30, 1979-81 

[In billions] 

1979 

Actual 

Additions to State, local, and private assets 

Community and regional development ................................ . $4.4 

Environment ..................................................... . 4.0 

Local public works ................................................ . 1.7 

Transportation 

Highways and mass transit ....................................... . 8.8 

Other transportation ............................................. . .6 

rn~ ............................................................ . .3 

Total additions ............................................ , .... . 19.8 

Other developmental expenditures 

Agriculture .................................................... • • • • .6 

Conservation ..................................................... . 3.9 

Economic development ............................................ . .3 

Education ........................................................ . 9.5 

Educa\ion-income support. ......................................... . 6.0 

Environment ..................................................... . .5 

Health ........................................................... . 3.8 

Science and engineering ........................................... . 6.1 

Training ....................................................... ••• 9.6 

Transportation .................................................... . . 3 

rn~ ............................................................ . .3 

Total developmental expenditures ................................. . ~ 

Total investment outlays ..................................... . $60.7 

-----

Source: Budget of the United States Government, Fiscal Year 1981. 

20 

10-20 years or 

years longer 

~ 

$21.6 

~ 

$29.4 

.2 

--.2-

1.8 

--1-.8-

23.6 29.4 

18.1 19.7 

$5.5 $9.7 

1980 

--- Estimate 

$4.9 

4.2 

.4 

9.6 

.7 

.2 

2().0 

.7 

n 

.3 

10.9 

6.0 

.6 

4.2 

7.6 

9.2 

.3 . 

.4 

~ 

$63.9 

Various 

$54.0 

~ 

25.2 

1.3 

7.5 

--a:a 

88.0 

80.3 

$7.7 

1981 

$5.4 

4.2 

.2 

10.2 

.7 

.2 

2().9 

.7 

3.6 

.4 

10.9 

5.7 

.6 

4.3 

7.9 

10.1 

.3 

.5 

45.0 

$65.9 

33 
SCHEDULE VII . 

Analysis of Pension and Retirement Plans 

as of September 30, 1979 

[In billions] 

Social Military Civilian 

security personnel employees 

Liabilities 

Accrued liability, September 30, 1978 ....................................... . 

Add: 

Accruals ........................................................... . 

Deduct: 

Benefits paid ....................................................... . 

Accrued liability, September 30, 1979 ....................................... . 

Accrued liability, September 30, 1979 ........................................ . 

Cumulative trust fund transactions through end of period 

Receipts ............................................................. . 

Outlays (net of unamortized discount and premium on investments) ........... . 

Total assets of the trust fund .......................................... . 

Liability net of trust balance, September 30, 1979 ....................... . 

Social security 

Number Percent of 

of years taxable 

covered 

Projected cash receipts 

payroll Amount 

and disbursements 

Cash receipts 

1979 ............................... 1 10.25 $106.4 

1980-1983 .......................... · 4 10.81 588.5 

1984-1993 .......................... 10 12.20 2,825.8 

1994-2003 .......................... 10 13.84 5,975.7 

Subtotal ....................... 25 9,496.4 

2004-2028 .......................... 25 14.61 47,801.7 

2029-2053 .......................... 25 9.92 129,145.2 

Total .......................... 186,443.3 

Cash disbursements 

1979 ............................... 10.36 107.6 

1980-1983 .......................... 4 10.45 567.7 

1984-1993 .......................... 10 10.59 2,427.8 

1994-2003 .......................... 10 10.67 4,587.2 

Subtotal ....................... 25 7,690.3 

2004-2028 .......................... 25 13.26 46,208.9 

2029-2053 .......................... 25 16.30 229,742.0 

Total .......................... 283,641.2 

Net receipts or (disbursements) .. $(97,197.9) 

1979 1978 1977 1976 

Beneficiaries 

Number receiving benefits (thousands) 

Social security ....................... 35,125 34,587 34,084 33,024 

Military personnel .................... 1,263 1,220 1,175 1,129 

Civilian employees ......... , .......... 1,637 1,583 1,508 1,432 

Other plans .......................... NIA NIA NIA NIA 

Average monthly benefits (dollars) 

Social security ....................... 258 229 211 194 

Military personnel .................... 713 626 583 539 

Civilian employees ................... 608 604 527 495 

Other plans .......................... NIA NIA NIA NIA 

NIA Not available. 

34 

$928.0 

241.5 

107.6 

$1,061.9 

$1,061.9 

916.7 

882.6 

34.1 

$1,027.8 

Military 

personnel 

•Amount 

$10.8 

56.5 

241.3 

416.4 

725.0 

725.0 

$(725.0) 

Calendar year 

1975 1974 

32,085 30,854 

1,070 1,007 

1,372 1,306 

NIA NIA 

179 162 

486 424 

439 366 

NIA NIA 

$210.1 $356.2 

104.1 24.6 

10.3 12.1 

$303.9 $368.7 

$303.9 $368.7 

156.5 

92.3 

64.2 

$303.9 $304.5 

Civilian employees 

Contribution 

rate 

(percent) Amount 

7 $18.9 

7 88.3 

7 327.2 

7 547.7 

982.1 

7 3,226.8 

7 9,663.8 

13,872.7 

12.1 

61.5 

259.6 

~ 

443.7 

2,884.7 

9,393.8 

13,055.4 

$817.3 

1973 1972 1971 

29,872 28,345 27,289 

946 890 831 

1,192 1,092 1,026 

NIA NIA NIA 

143 137 112 

387 364 340 

308 276 266 

NIA NIA NIA 

, 

Other 

$NIA 

NIA 

NIA 

$NIA 

$NIA 

NIA 

NIA 

NIA 

$NIA 

Other 

Amount 

$NIA 

NIA 

NIA 

NIA 

NIA 

NIA 

NIA 

NIA 

NIA 

NIA 

. NIA 

NIA 

NIA 

NIA 

~ 

NIA 

$NIA 

1970 

26,235 

773 

959 

NIA 

·100 

307 

231 

NIA 
SCHEDULE VIII 

Estimated Interest Subsidy 

on Direct Loans Outstanding 

as of September 30, 1979 

[In billions] 

Total Treasury Range 

Total Loan subsidized borrowing charged Annual Total 

Agency and program loans maturity loans range borrower cost to cost to 

Domestic loans outstanding range outstanding (percent) (percent) Government Government 

Agriculture 

Farmers Home Administration ............. $3.1 Up to 40 $NIA 3.1-8.6 Various $NIA $NIA 

Rural Electrification Administration 

Electric systems ...................... 7.2 35 3.1-8.6 2-5 

Telephone systems .................... 2.8 35-50 3.1-8.6 2-5 

Other .................................. Up to 40 3.1-8.6 Various 

Commerce 

Economic Development Administration ..... .7 Up to 40 3.1-8.6 3.4-8.3 

Other .................................. .1 3-30 3.1-8.6 3-9.5 

Health, Education, and Welfare 

Health Resources Administration .......... .6 5-20 3.1-8.6 2.3-10.6 

Office of Education ...................... 5.2 Various 3.1-8.6 Various 

Other .................................. .1 Up to 30 3.1-8.6 3-7.5 

Housing and Urban Development 

Federal housing ......................... 3.1 Up to 40 3.1-8.6 3-12 

Government National Mortgage 

Association .......................... 3.3 25-30 3.1-8.6 7.5-8.5 

Community development. ................ .5 Up to 20 3.1-8.6 Various 

College housing ......................... 3.0 30-50 3.1-8.6 2.8-3.8 

Elderly or handicapped ................... 1.2 30-50 3.1-8.6 6.9-7.4 

Other .................................. .6 Up to 50 3.1-8.6 2.5-8.7 

Interior 

Reclamation ............................ .2 22-50 3.1-8.6 3-4.1 

Other .................................. .1 Up to 30 3.1-8.6 2-10.2 

Transportation 

Highways .............................. .2 2-10 3.1-8.6 

Other .................................. .1 1-40 3.1-8.6 1-8.4 

Veterans 

Insurance .............................. 1.2 Indefinite 3.1-8 .. 6 4.5 

Education and housing ................... .1 Indefinite 3.1-8.6 3-9.5 

Other .................................. 1.7 7-30 3.1-8.6 4-9.5 

District of Columbia ....................... 1.4 5-40 3.1-8.6 2.6-10.3 

Interstate Commerce Commission ........... .1 1-25 3.1-8.6 3-9.5 

Small Business 

Business and investment. ................ 2.0 Up to 25 3.1-8.6 3-8 

Disaster ............................... 4.6 Up to 30 3.1-8.6 7.4 

U.S. Railway Association ................... 2.9 3-15 3.1-8.6 7-10 

Federal Financing Bank .................... 47.1 Up to 30 3.1-8.6 6.4-10 

rn~ .................................... .8 Various 3.1-8.6 1-13.5 

Subtotal ............................. 94.1 NIA NIA NIA 

Foreign loans 

International security assistance, 

Military Sales Act ........................ 1.6 Up to 40 1.6 3.6-8.6 3.0-8.3 .3 

Agency for International Development 

Currency loans to foreign governments ..... 1.0 Up to 40 1.0 2.6-6.7 .8-7.8 

Currency loans to private enterprises ....... 4-22 3.2-7.4 4-10 

Country loans ........................... 15.2 Up to 45 15.2 2.2-8.6 .8-8.2 .2 7.3 

Agriculture 

Commodity loans ........................ 5.2 4-30 4.8 6.3-8.6 6.2-9.3 .1 

Long-term export sales ................... 6.5 7-40 6.5 3.2-8.6 .8-6.9 .1 3.9 

Short-term export sales ................... 2.6 3 2.2 6.3-8.6 1.1-11.5 

Treasury 

Lend-lease and surplus property ........... 1.3 15 Up to 5.1 4.0 

Loans to the United Kingdom .............. 2.4 55 2.4 2.0 2.0 

.Other .................................. .1 Indefinite .1 7.4 3.0 

Export-Import Bank of the United States ....... 11.9 Up to 30 2.0-8.6 Various 

International Communication Agency ........ 4-25 2.2-7.4 Various 

Other .................................... .1 Various 2.2-7.4 Various 

Subtotal ............................. 47.9 45.4 .3 11.6 

Total .............................. $142.0 $NIA $NIA $NIA 

NIA Not available. 

• Less than $100 million. 

35 
SCHEDULE IX 

Federal Facts and Figures 

Gross national product 

Current dollars ....................................................... . 

Per capita ...................................................... - .. . 

1972 dollars ......................................................... . 

Per capita .............. _ ........................... - .... - - - ... • - - - - • 

Population (includes Armed Forces) ....................................... . 

Consumer Price Index 

All items (1967 = 100) ................................................. . 

Purchasing power (1967 = $1.00) ....................................... . 

Employment 

Total labor force ..................................................... . 

Total employed ...................................................... . 

Federal employment 

Military ................ - .. - - - - ·. - · - - · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 

Civilian ........................................................... . 

Federal employment as a percent of total U.S. employment ................. . 

Federal debt 

Gross debt .......................................................... . 

1972 dollars ....................................................... . 

Held by public (current dollars) ......................................... . 

Percent of GNP ...................................................... . 

Per capita ........................................................... . 

1972 dollars ......................................................... . 

Interest on the Federal debt (current dollars) . ............................... . 

Per capita ........................................................... . 

Percent of GNP ...................................................... . 

Percent of total Federal expenses ....................................... . 

1972 dollars ......................................................... . 

Total Federal expenses (accrual) 

Current dollars ....................................................... . 

Percent of GNP ...................................................... . 

Per capita ........................................................... . 

Personal income 

Current dollars ....................................................... . 

Percent of GNP .................................................... . 

Per capita .................................... - .... - - .. - .... - - •. • - - -

1972 dollars ......................................................... . 

Percent of GNP .................................................... . 

Per capita ............. · ............................................ . 

Total income taxes paid for adjusted income levels 

Under $6,000 ........................ : ............................... . 

Number of taxpayers .................................................. . 

$6,000-$9,999 ........................................................ . 

Number of taxpayers .................................................. . 

$10,000-$15,999 ...................................................... . 

Number of taxpayers .................................................. . 

$16,000-$24,999 ...................................................... . 

Number of taxpayers .................................................. . 

$25,000-$49,999 ...................................................... . 

Number of taxpayers .................................................. . 

$50,000-$99,999 ...................................................... . 

Number of taxpayers .................................................. . 

$100,000-$999,999 .................................................... . 

Number of taxpayers .................................................. . 

$1 million and over ................................................... . 

Number of taxpayers .................................................. . 

Federal participation in domestic credit markets 

Total funds advanced in U.S. credit markets (nonfinancial sectors) ........... . 

Total funds advanced under Federal guidance (direct and guaranteed loans) ... . 

Federal participation rate .............................................. . 

Total funds raised in U.S. credit markets (nonfinancial sectors) .............. . 

Total funds raised under Federal guidance (includes Federal borrowing from the 

public, guaranteed borrowing, and sponsored agency borrowing) .......... . 

Federal participation rate .............................................. . 

36 

Unit of 

measure 

billions 

dollars 

billions 

dollars 

millions 

millions 

millions 

millions 

millions 

percent 

billions 

billions 

billions 

percent 

dollars 

billions 

billions 

dollars 

percent 

percent 

billions 

billions 

percent 

dollars 

billions 

percent 

dollars 

billions 

percent 

dollars 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

thousands 

billions 

billions 

percent 

billions 

billions 

percent 

1979 

2,395 

10,848 

1,434 

6,496 

220.8 

223.7 

.45 

103.5 

97.5 

2.1 

2.8 

5.0 

833.8 

499.3 

639.4 

26.7 

2,896 

382.9 

48.3 

218.7 

2.0 

7.4 

28.9 

652.2 

27.2 

2,954 

1,959 

81.8 

8,870 

1,173 

81.8 

5,312 

1.4 

19,340 

7.5 

15,451 

20.9 

16,796 

44.3 

17,977 

78.4 

14,962 

29.7 

1,878 

27.7 

442 

4.0 

4 

410.7 

73.3 

17.8 

410.7 

81.2 

19.8 

1978 1977 

2,141 1,916 

9,784 8,823 

1,394 1,347 

6,370 6,205 

218.9 217.2 

199.1 184.0 

.50 .54 

100.9 97.9 

94.9 91.1 

2.2 2.1 

2.8 2.7 

5.3 5.3 

780.4 709.1 

508.1 498.7 

606.7 548.6 

28.3 28.6 

2,772 2,525 

395.0 385.7 

48.7 41.9 

222.5 192.9 

2.3 2.2 

8.5 8.9 

31.7 29.5 

570.7 472.9 

26.7 24.7 

2,607 2,177 

1,743 1,561 

81.4 81.5 

7,963 7,190 

1,135 1,098 

81.4 81.5 

5,185 5,056 

1.6 1.6 

22,284 22,630 

7.9 7.6 

15,153 15,037 

21.4 21.2 

16,694 16,815 

44.5 41.7 

17,503 16,594 

64.7 49.1 

11,911 9,078 

24.3 19.2 

1,468 1,122 

22.0 17.2 

352 273 

2.1 1.9 

2 2 

366.9 317.5 

59.0 36.6 

16.1 11.5 

366.9 317.5 

94.5 78.9 

25.8 24.9 
_, 

DEPARTMENT OF THE TREASURY 

FISCAL SERVICE 

BUREAU OF GOVERNMENT FINANCIAL OPERATIONS 

WASHINGTON, D.C. 20226 

OFFICIAL BUSINESS 

PENALTY FOR.PRIVATE USE, $300 

POSTAGE AND FEES PAID 

DEPARTMENT OF THE TREASURY 

TREAS 553 

... ~- t··-- ---·~ 

00 ' 

L